Most businesses are organized according to a tree-structured hierarchy that represents departments and/or personnel as nodes, linked according to reporting structure, to define what is conventionally called an organizational chart or org chart. While the org chart is helpful in conveying a corporate hierarchy (who reports to whom) the org chart can become cumbersome in large organizations. Moreover, being designed primarily to illustrate the organizational architecture, the org chart is not so useful in conveying performance dimensions, such as which sales persons closed the most deals, or which divisions are most profitable under different business conditions. Indeed, sometimes the classic org chart can even mask important underlying performance issues or other problems within an organization. For example, a classic org chart will not reveal that the company's highly dispersed marketing teams are not taking advantage of the company's scale (each team may be focused on a niche market, missing the opportunity for cross-selling). Similarly, a classic org chart will not reveal that over half of the people in the sales organization are not customer facing (they may be performing internal operational or support roles that are blind to customer needs).
Org charts, by their very nature, are static tools that capture and present a snapshot of the instantaneous architectural state of an organization. As such, the classic org chart falls short when plotting how to best integrate the merger of one company into another, how to cut an organization's costs, or how to best divest an underperforming division. With the classic org chart it is difficult to play different “what-if” scenarios in deciding, for example, how best to absorb the resources of the acquired company. The same is true when planning cost cutting or divestitures. If the IT department is transferred as part of the accounting function of the divested company, will it leave the surviving company without needed resources? These are some of the kinds of questions that business planners need to answer.